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Study Resources (Accounting)

41) If a corporation distributes appreciated property to its shareholders, the corporation is treated as if it sold the property to the shareholders for its FMV immediately before the distribution, and the corporation will recognize any realized gain. 42) A corporation redeems 10 percent of the stock of each shareholder in.
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31) The citation "Reg. Sec. 1.199-2" refers to A) the first regulation issued in 1999. B) the second regulation issued in 1999. C) a regulation that interprets Code Section 199. D) a regulation that can be found on page 199. 32) Which regulation deals with Code Section 165? A) Reg. Sec. 1.165-5 B) Reg. Sec. 165.183-5 C) Reg..
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103) During the year, Jim incurs $50,000 of rehabilitation expenditures in connection with a certified historic structure used in his business. The adjusted basis of the structure was $40,000 at the time the rehabilitation began. a.What is the amount, if any, of his rehabilitation credit for the year? b.What is the depreciable.
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1) The present AMT applies to individuals, corporations, estates, and trusts. 2) The alternative minimum tax applies to individuals only if it exceeds the taxpayer's regular income tax liability. 3) For purposes of the AMT, the standard deduction, but not the personal and dependency exemptions, is allowed. 4) An example of an AMT.
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1) Income of a C corporation is subject to an initial tax at the corporate level and the shareholders are subject to a second tax if the corporation pays dividends from its earnings and profits. 2) Partnerships, limited liability partnerships, limited liability companies, and C corporations are considered flow-through entities for.
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94) Jacqueline dies while owning a building with a $1,000,000 FMV. The building is classified as Sec. 1245 property acquired in 1985 for $850,000. Cost-recovery deductions of $850,000 have been claimed. Pam inherits the property. a.What is the amount of Pam's basis in the property? b.What is the amount of cost-recovery deductions.
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86) On June 1, 2010, Buffalo Corporation purchased and placed in service 7-year MACRS tangible property costing $100,000. On November 10, 2013, Buffalo sold the property for $102,000 after having taken MACRS $47,525 in depreciation deductions. What is the amount and character of Buffalo's gain? 87) An unincorporated business sold two.
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41) Reva and Josh Lewis had alternative minimum taxable income of $350,000 in 2013 and file a joint return. For purposes of computing the alternative minimum tax, their exemption is A) $31,775. B) $51,900. C) $49,025. D) $80,800. 42) In computing AMTI, tax preference items are A) excluded. B) added only. C) subtracted only. D) either added or subtracted. 43).
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21) Identify which of the following statements is true. A) Paragraph references are most commonly used when citing or referring to the tax statutes. B) Title 26 of the United States Code and the Internal Revenue Code of 1986 are synonymous. C) Before 1939, tax statutes were codified or compiled into one document. D).
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11) When a taxpayer contacts a tax advisor requesting advice as to the most advantageous way to dispose of a stock, the tax advisor is faced with A) a restricted-fact situation. B) a closed-fact situation. C) an open-fact situation. D) a recognized-fact situation. 12) Investigation of a tax problem that involves a closed-fact situation means.
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112) Discuss the differences and similarities between regular and memorandum decisions issued by the U.S. Tax Court. 113) Assume that the Tax Court decided an expenditure in question was deductible. The government appealed to the Fifth Circuit, which reversed the decision and held it was not deductible. No other circuits have.
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91) A calendar-year corporation has a $15,000 current E&P deficit and a $40,000 positive accumulated E&P balance. Also assume that shareholders of the corporation have a total basis in outstanding shares of $30,000. A $75,000 distribution is made to the shareholders on the last day of the year. The tax.
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61) Chocolat Inc. is a U.S. chocolate manufacturer.  Its domestic production income is $2,000,000. Taxable income before the domestic production deduction is $3,000,000. What is the amount of the production activities deduction? A) $270,000 B) $180,000 C) $90,000 D) $60,000 62) Chocolat Inc. is a U.S. chocolate manufacturer. Its domestic production income is $4,000,000. Taxable.
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11) If a corporation owns less than 20% of the stock of the distributing corporation, the dividends-received deduction is not allowed for the recipient corporation. 12) If a corporation receives dividends from an 80% or more owned affiliated corporation, the dividends-received deduction is 100%. 13) In computing a corporation's NOL, the dividends-received.
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51) John has $55,000 net earnings from a sole proprietorship. John is also employed by a major corporation and is paid $25,000. John's self-employment tax (rounded) for 2013 is A) $3,886. B) $4,208. C) $7,771. D) $8,415. 52) Joe has $130,000 net earnings from a sole proprietorship. Joe's self-employment tax (rounded) for 2013 is A) $17,581. B).
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51) Musketeer Corporation has the following income and expense items during the current year: Net income from operations (before dividend income) $ 120,000 Dividends from 10% owned corporations 240,000 The allowed dividends-received deduction is A) $ 120,000. B) $ 168,000. C) $192,000. D) $240,000. 52) Jenkins Corporation has the following income and expense items during the current year: Net loss from.
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81) Elaine owns equipment ($23,000 basis and $15,000 FMV) and a building ($136,000 basis and $148,000 FMV), which are used in her business. Elaine uses straight-line depreciation for both assets, which were acquired several years ago. Both the equipment and the building are destroyed in a fire, and Elaine collects.
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90) Julie sells her manufacturing plant and land originally purchased in 1980. Accelerated depreciation had been taken on the building, but the building is now fully depreciated. Julie is in the 39.6% marginal tax bracket. Other information is as follows: PropertyOriginal costTotal depreciationAdjusted basis              Selling price Plant              $2,800,000              $2,800,000$0$3,000,000 Land              $   500,000$500,000$800,000 She has.
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89) Are letter rulings of precedential value to third parties? 90) What is the difference between a taxpayer-requested letter ruling and a technical advice memorandum issued as a letter ruling? 91) What is an information release? 92) What are some of the factors to consider when deciding in which court to file a.
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71) Dozen Corporation is owned equally by twelve unrelated individuals. Its taxable income this year is $100,000 and its regular federal income tax liability is $22,250. The company claims a $20,000 dividends-received deduction and pays $25,000 dividends to its shareholders. The corporation had accumulated earnings and profits of $900,000 at.
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51) Emma owns a small building ($120,000 basis and $123,000 FMV) and equipment ($35,000 basis and $22,000 FMV). Both assets were acquired three years ago, are used in Emma's business, and are depreciated using straight-line depreciation. Both are destroyed by fire. Insurance proceeds were equal to their FMVs. Only one.
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31) Installment sales of depreciable property which result in recaptured income under Secs. 1245 or 1250 require that the recaptured income be recognized in the year of sale. 32) Costs of tangible personal business property which are expensed under Sec. 179 are subject to recapture if the property is converted to.
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104) Small Corporation had the following capital gains and losses during the current year: LTCG              $30,000 LTCL              $23,000 STCG              $ 9,000 STCL              $18,000 Taxable income, exclusive of the capital gains and losses above, is $68,000. a.How should the capital gains and losses be treated for the current year? b.What is the taxable income for the current year.
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76) Lucy, a noncorporate taxpayer, experienced the following Section 1231 gains and losses during the years 2008 through 2013. Her first disposition of a Sec. 1231 asset occurred in 2008.  Assuming Lucy had no capital gains and losses during that time period, what is the tax treatment in each of.
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21)  Taxpayers with income below phase-out amounts are allowed a child credit of $1,000 for each qualifying child under age 17. 22) Qualified tuition and related expenses eligible for the American Opportunity Tax Credit are limited to those incurred the first two years of postsecondary education. education. 23) Brad and Shelly's daughter is.
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97) Sam and Megan are married with two dependent children.  Both Sam and Megan work, earning $50,000 and $55,000, respectively.  Their AGI totals $110,000.  They incur $6,500 of qualifying child care expenses of which $2,500 is reimbursed by Megan's dependent care program at work. What is the amount of their child.
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79) Explain the difference between a closed-fact and open-fact situation. 80) In all situations, tax considerations are of primary importance. Do you agree or disagree? Support your answer. 81) Describe the format of a client memo. 82) Explain how committee reports can be used in tax research. What do they indicate? 83) In 1998,.
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31) Research expenses eligible for the research credit include costs that are incident to the development or improvement of a product or component. 32) The earned income credit is refundable only if a tax has been withheld. 33) The earned income credit is available only to taxpayers with qualifying children. 34) If an.
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11) If realized gain from disposition of business equipment exceeds total depreciation or cost recovery, a portion of the gain will receive Sec. 1231 treatment if the equipment's holding period is more than one year. 12) The purpose of Sec. 1245 is to eliminate the advantage taxpayers would have if they.
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31) Corporations that are members of a brother-sister affiliated group may file a consolidated return if the proper election is made. 32) If certain requirements are met, Sec. 351 permits deferral of recognition of gain or loss on the transfer of property to a corporation solely in exchange for stock of.
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107) Compare and contrast proposed, temporary, and final regulations. 108) Compare and contrast "interpretative" and "statutory" regulations. 109) Explain the legislative reenactment doctrine. 110) In which courts may litigation dealing with tax matters begin? Discuss the factors that might be considered in deciding where to begin litigation. 111) Describe the appeals process in tax.
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21) The corporate AMT is similar to that applicable to individuals. 22) By calculating its depreciation using the most accelerated method available, a corporation increases the likelihood that it will be subject to the alternative minimum tax. 23) The purpose of the accumulated earnings tax is to discourage corporations from retaining excessive.
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11) Self-employed individuals are subject to the self-employment tax if their net earnings are more than the personal exemption amount. 12) One-half of the self-employment tax imposed is allowed as a for AGI deduction. 13) If an individual is an employee and also has self-employment income, the maximum tax base for computing.
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